By Maximilian Clarke
Executive pay must be tied to performance, concluded the Confederation of British Industry yesterday (Wednesday) concluded following a report into executive remuneration.
The prominent business lobby’s conclusion increasingly reflect those of the public, and the government is actively attempting to curb the worst excesses of the city. Public anger over corporate excess led to Occupy protesters storming the Xstrata mining headquarters where its CEO Mick Davis is said to have made £18.5m in the last financial year.
However previous attempts to curtail bonuses in the city met little success. Commenting today in response to the CBI’s report, Business Secretary Vince Cable said:
“The CBI is reflecting the views of growing numbers in the business community who agree that executives should be rewarded for contributing to the success of their company, but that extravagant rewards for failure need to stop.
"Their support for measures such as increased transparency, clawback mechanisms to prevent payments for failure, and reform of the make-up of remuneration committees is welcome.
"I am grateful to the CBI for their leadership in this debate, putting it on the side of 'responsible capitalism'. I hope they will now work with their members to promote the changes we need to see.
"The Government is currently considering all the responses we've received and we will announce the next steps early next year."